EU to push for trade breaks for Pakistan

Representatives of 23 countries to meet in Brussels on Friday to assess what long-term financial help Pakistan needs.

BRUSSELS: The European Union will urge countries to join it in granting Pakistan trade breaks to help the country cope with widespread floods while calling on Islamabad to pursue reforms, an EU official said on Tuesday.

Representatives of 23 countries, as well as officials from the World Bank and the Asian Development Bank, will meet in Brussels on Friday to assess what long-term financial help Pakistan needs to recover from the floods.

The assessment, from the Friends of Democratic Pakistan group, will be forwarded to a meeting of donor countries to be held in Islamabad in November.

While offering Pakistan support, and urging other countries to follow its lead with trade breaks and economic incentives, the European Union will call on Pakistan to reform its administration, including by broadening the tax base.

“The aim is to send a strong signal of solidarity to Pakistan,” an EU official said. “And it’s an opportunity for Pakistan to present a plan for reconstruction, including economic and institutional reforms.”

Pakistan says it needs more international support, including greater market access, to help stabilise its economy after devastating floods which have killed more than 1,900 people and affected at least 20 million.

The EU announced a scheme last week to suspend tariffs on 75 types of Pakistan-made goods accounting for about 27 per cent of exports to the EU. EU institutions and member states have also pledged some 400 million euros in aid.

Officials say the EU trade breaks would increase Pakistan’s sales in the bloc by about 100 million euros ($139 million).

Many leading Pakistani textile manufacturers say, however, the EU concessions will be largely meaningless unless the main products - bed linen and knitwear - are on the list of duty-free items receiving tariff cuts.

The Friends of Democratic Pakistan forum groups Britain, China, France, Germany, Japan, Saudi Arabia, Turkey and the United States, as well as the European Union and the United Nations, to support economic development in the country and fight terrorism.

Published in The Express Tribune, October 13^th, 2010.